Just like bending a flat into an AKm receiver, re-welding a properly demilled receiver makes you the manufacturer. Legal to sell provided you originally built it for personal use and stamp the required info on it, as per the ATF letter regarding AKM flats. However, as manufacturer you now take on the liability associated with that receiver. If the welds ever fail or someone uses it to shoot somebody, guess who is wide open for a lawsuit?

Additionally, ATF has been known to change their minds about what constitutes "properly destroyed" in regards to MG receivers. They may decide a cut was off by a fraction of an inch or not enough metal was removed during a cut and declare the metal pieces you welded together were in fact still an MG receiver even when they were in pieces. If they ever come looking for it......

Nevermind selling one...unless you are a C2 manufacturer making a post '86 dealer sample, it is illegal for you to reweld ANY demilled MG receiver back to it's original spec where it will accept it's original MG parts. If you want to make a semi '34 or '42 from an original receiver it would be prudent for you to contact ATF and request their guidelines for building a semi from a MG receiver for the specific firearm you have in mind. After you have received their detailed summary of what you must do, can you then proceed as directed.

As kk and p56 have mentioned, the receivers must be modified [as in "not readily restorable"] so as not to allow the introduction of any of the unmodified original parts so it won't go bangbangbangbang with one pull of the trigger. This has been successfully accomplished in the past by the addition of protruding bars inside the receiver & the use of slotted bolts, open bolt to closed bolt conversions/operation, thicker sideplates, and different FCG configurations.

I'd be real careful before proceeding beyond the thought stage...even if you welded up an old sawcut STeN kit you had lying around into a mobile to hang in your shop it could be construed as possession of an illegal MG receiver by ATF [unless of course it was welded together at 90 degree angles or some other such rediculous & obvious non-gun configuration], and that my friend is just not worth a trip to ClubFed.

So if Gunco does all the modifications as per you guys instructions. Would he not be able to legally sell the weapon through an FFL dealer.
As I am sure most FFL dealers carry a ton of insurance. Would there insurance and paper work not protect him.
I am starting to see, now just a guess, homebuilts being sold in gun shops.
The antis have been trying lawsuits, with minor success, against manufactures.
If Gunco built the weapon. I am sure it was done rite from a functioning standpoint.
I recently sold a 9mm to my FFL in trade for a new Glock. I asked him if he did not have to call the numbers in to see if it was stolen.
"Why, they put me on hold, they tell me they will get back to me, which they never do."
While living in South Florida. Every so often the news station would go into a pawn shop with a person that showed them items that were stolen from them.
Police response. "Prove it was stolen, what the hell do you want us to do? We don't have time for this."
I guess my question is. Could he sell it legally through an FFL dealer?

"Man needs but two things to survive alone in the woods. A blow up female doll and his trusty old AK-47" - Thomas Jefferson 1781

Homebuilts on commercially produced receivers can be sold as-is just like any other legal firearm, the "receiver is the gun" under Fed law and the receiver was properly marked by NODAK or whoever made it and sold it through an FFL. Many are being sold, and there is nothing illegal about doing so unless you are unlicensed and building them for the purpose of selling them. However, the person who assembled the rifle is also one of the parties who had a hand in making a functional firearm from a receiver. In the event of a lawsuit figure NODAK will be one of the entities sued, along with the gunshop who sold it and the guy who assembled it. That is why I am sure NODAK and any gunshop owner with any sense has a huge liability insurance policy in effect for just such a suit. Does the homebuilder? Possibly might be covered under their homeowner's policy but doubtful.

Total homemade receivers, whether it is a bent flat or a reweld using "scrap metal", the maker is open to much more liability as NODAK or whoever is out of the equation. No "deep pockets" company to go after, just you and your house. ATF has said if you decide to sell a homebuilt receiver/firearm it is legal to do so provided you stamp the makers name, serial #, etc. just like Remington and Colt have to. Most FFLs would not touch such a receiver as they are ignorant of the ATF decision allowing it, plus no manufacturer to take the heat along with them if something should ever come up.

I'm sure Gunco would make a good build, however the first time somebody puts a double charged handload through it and blows it up, or decides to take out the neighbors and himself in a "blaze of glory" on the evening news you can bet somebody is gonna get sued and the list of possible parties is pretty short.

Not saying you should never sell a homebuild, it is legal to do so. Just want you to be aware of the downside.